BSRIA reacts to Carney's speech on climate change riskOctober 2015

Commenting on Bank of England governor, Mark Carney’s speech at a gathering of leading insurers at Lloyd’s of London, Julia Evans, Chief Executive, BSRIA, said:

“The Bank of England governor has given a stark warning that climate change poses a huge risk to global stability. Mr Carney has pointed out the rapid increase in weather-related catastrophes and the jump in both the physical and financial costs. He said the challenges currently posed by climate change ‘pale in significance compared with what might come’. And that this generation had little incentive to avert future problems.

He avoided spelling out what was causing this apparent change, but said evidence was mounting of man's role in climate change. This causes great concern to BSRIA, its members and the industry.

Recently, BSRIA has been getting the impression that energy and carbon reduction issues are being viewed as a burden to government – which is inhibiting – not only the industry – but the economy at large – especially those centering on the ending of and reliance on subsidies for energy saving schemes. We agree wholeheartedly with Mr Carney’s warnings and would add that government could and should be doing more – right now – to prevent such climate change risk to world-wide stability.

Broader, global impacts are at play here regarding property, migration and political stability, as well as food and water security. These are worrying times.”

Insurers are among those with the biggest interest in climate change as the syndicates operating at Lloyd's, the world's oldest insurance market, are the most exposed to disasters such as hurricanes and floods. Mr Carney said the after-effects of such disasters were likely to grow worse: ‘The challenges currently posed by climate change pale in significance compared with what might come.’

He went on to say that because the cost would fall on future generations there was little impetus on the current one to fix it: ‘In other words, once climate change becomes a defining issue for financial stability, it may already be too late.’